Analyse the effect of each transaction on assets and liabilities and show that the both sides of Accounting Equation (A = L + C)remains equal : i) Introduced 8,00,000 as cash and50,000 by stock. (2)Purchased plant for3,00,000 by paying15,000 in cash and balance at a later date. (iii) Deposited 6,00,000 into the bank. (iv) Purchased office furniture for 1,00,000 and made payment by cheque. (v) Purchased goods worth 80,000 for cash and for 35,000 in credit. (vi) Goods amounting to45,000 was sold for 60,000 on cash basis. (vii) Goods costing to 80,000 was sold for1,25,000 on credit. (viii) Cheque issued to the supplier of goods worth35,000. (ix) Cheque received from customer amounting to75,000. (x) Withdrawn by owner for personal use25,000.

Analyse the effect of each transaction on assets and liabilities and s

1.	Analyse the effect of each transaction on assets and liabilities and show that the both sides of Accounting Equation (A = L + C)remains equal : i) Introduced 8,00,000 as cash and50,000 by stock. (2)Purchased plant for3,00,000 by paying15,000 in cash and balance at a later date. (iii) Deposited 6,00,000 into the bank. (iv) Purchased office furniture for 1,00,000 and made payment by cheque. (v) Purchased goods worth 80,000 for cash and for 35,000 in credit. (vi) Goods amounting to45,000 was sold for 60,000 on cash basis. (vii) Goods costing to 80,000 was sold for1,25,000 on credit. (viii) Cheque issued to the supplier of goods worth35,000. (ix) Cheque received from customer amounting to75,000. (x) Withdrawn by owner for personal use25,000.
Answer» <html><body><p></p>Solution :Transaction (i) It affects Cash and Inventory on the <a href="https://interviewquestions.tuteehub.com/tag/assets-885948" style="font-weight:bold;" target="_blank" title="Click to know more about ASSETS">ASSETS</a> side and Capital on the other hand. There is increase in cash by8, 00,000 and Inventory of goods by50,000 on assets side of the equation. Capital is increased by8, 50,000. <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/NCERT_ACC_XI_P1_C03_S01_006_S01.png" width="80%"/><br/> Transaction (ii) It affects Cash and Plant and Machinery on the assets side and liabilities on the other side of the equation. There is an increase in plant and machinery by3, 00,000 and decrease in cash by15,000. Liability to pay to the <a href="https://interviewquestions.tuteehub.com/tag/supplier-1235225" style="font-weight:bold;" target="_blank" title="Click to know more about SUPPLIER">SUPPLIER</a> of plant and machinery increases by2,85,000 <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/NCERT_ACC_XI_P1_C03_S01_006_S02.png" width="80%"/><br/> Transaction (iii)It affects assets side only. The composition of the asset side changes. Cash decreases by6,00,000 and by the same amount bank increases. <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/NCERT_ACC_XI_P1_C03_S01_006_S03.png" width="80%"/> <br/> Transaction (<a href="https://interviewquestions.tuteehub.com/tag/iv-501699" style="font-weight:bold;" target="_blank" title="Click to know more about IV">IV</a>) It affects assets side only. The composition of the asset side changes. Furniture increases by1,00,000 and by the same amount bank decreases. <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/_NCERT_ACC_XI_P1_C03_S01_006_S04.png" width="80%"/> <br/>(V) It affects Cash and Inventory on the assets side and liability on the other side. There is decrease in cash by80,000 and increase of inventory of goods by 1,15,000 on the assts side of the equation. Liabilities increases by35,000. <br/><img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/NCERT_ACC_XI_P1_C03_S01_006_S05.png" width="80%"/> <br/> Transaction (<a href="https://interviewquestions.tuteehub.com/tag/vi-723586" style="font-weight:bold;" target="_blank" title="Click to know more about VI">VI</a>) It affects Cash and Inventory on the assets side and capital on the other side. There is an increase in cash by60,000 and decrease in inventory of goods by45,000 on the assets side of the equation. Capital increases by 15000 <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/NCERT_ACC_XI_P1_C03_S01_006_S06.png" width="80%"/> <br/> Transaction (vii)It affects Debtors and Inventory on the assets side and capital on the other side. There is increase in debtors by1, 25,000 and decrease in Inventory of goods by80,000 on the assets side of the equation. Capital increases by Rs.45, 000. <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/_NCERT_ACC_XI_P1_C03_S01_006_S07.png" width="80%"/><br/> Transaction (viii) It affects Bank on the assets side on <a href="https://interviewquestions.tuteehub.com/tag/one-585732" style="font-weight:bold;" target="_blank" title="Click to know more about ONE">ONE</a> side and liability on the other side. There is decrease in bank by35,000 on the assets side and liability also decreases by 35000 <br/> <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/_NCERT_ACC_XI_P1_C03_S01_006_S08.png" width="80%"/> <br/>Transaction (ix) It affects assets side only. The composition of the assets side changes. Bank increases by75,000 and by the same amount Debtors decreases. <br/><img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/NCERT_ACC_XI_P1_C03_S01_006_S09.png" width="80%"/> <br/>It affects Cash on the asset side and Capital on the other hand. There is decrease in Cash by25,000 on the assets side whereas capital decreases by25,000 <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/_NCERT_ACC_XI_P1_C03_S01_006_S10.png" width="80%"/></body></html>

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